Fitch downgrades Tata Steel ratings

PTIApr 3, 2009, 10.58pm IST

NEW DELHI: Rating agency Fitch on Friday said it has downgraded its various ratings for world's sixth largest steel producer Tata Steel's India as well as UK operations and also said that the outlook remains negative for the entities.

Simultaneously, Fitch has also downgraded Tata Steel UK's Long-term foreign currency IDR to B+ from BB," the rating agency said in a statement.

The downgrade actions indicate that raising foreign currency and other long-term fund for Tata Steel could become costlier and more difficult.

"The outlook on all the ratings continues to be negative," the rating agency said in a statement.

Attributing the downgrade to the global slump in steel demand, the rating agency said the profitability and credit metrics of Tata Steel UK has been impacted, though continuing demand from the construction and infrastructure sectors has cushioned the impact of fall in prices in its India operations.

"While Tata Steel's India operations have also been impacted by the sharp drop in prices, the volume impact has been cushioned to an extent by continuing demand from construction and infrastructure space," it said.